Britain says it will spend more than $2 billion on cybersecurity and recruit 1,000 more intelligence officers as the country’s intelligence services warn of increasingly aggressive espionage tactics by Moscow, a charge the Kremlin denies.

The $2.3 billion investment is aimed at countering emerging threats to national security. British Chancellor of the Exchequer, Philip Hammond, said this week that key infrastructure, such as air traffic control systems and electricity grids, could be targeted by what he called "hostile foreign actors".

“It is our duty to demonstrate that they cannot act with impunity,” Hammond said. “So we will not only defend ourselves in cyberspace, we will strike back in kind when we are attacked.”

Hammond did not mention Russia by name. But writing in the Guardian newspaper the same day, the head of Britain’s domestic intelligence service known as MI5 accused Moscow of increasingly aggressive cyberattacks, espionage, propaganda and subversion, charges the Kremlin has denied.

“I think that in MI5 for a very long time they were consumed with counterterrorism,” said The Economist newspaper's Russia expert Edward Lucas. “This has been the absolute No. 1 priority. And it’s taking them a bit of time to get tooled up again to deal with the threat from Russia.”

Defend vs deter

Those tools can defend but can also deter, argues John Lough of policy institute Chatham House.

“The challenge for Western countries is to show, if you like, a degree of resolve for dealing with Russia, show the instruments they have available, showing in fact how those can be sharpened if needed if things were to get worse in Ukraine or elsewhere on the periphery,” Lough said.

Britain and the West lack a cohesive policy to counter the Russian threat, added Lucas.

“We need a joined-up response to Putin’s joined-up threat which links money, propaganda, espionage, the use of energy, subversion, military saber-rattling, all these things,” he said. “But certainly one of the weakest links is the bankers, lawyers and accountants in the West who help the Russian elite dispose of their money. They should be facing prosecution and extradition to the United States.”

Much of that Russian money passes through banks in London. Lucas argues this trade must be tackled simultaneously as Britain fends off cyberattacks.